The time to buy uranium stocks is now, and investors should seize the opportunity to capitalise on the heavy metal’s potential before the herd do, says Macquarie Private Wealth.

Macquarie believes that uranium is a fundamentally strong commodity which has a bright future; forecasts say it will reach $90 per pound by 2013 based on supply and demand predictions in which a shortfall is expected and demand is ever-increasing.

Uranium functions as an abundant energy source and is therefore used predominantly for generating electricity at nuclear power plants. Despite falling prices off the back of 2011’s Fukushima Daiichi nuclear disaster in Japan, the bank’s analysts believe that uranium is set to bounce back due to a number of factors, not least the world’s growing population and therefore exploding need for reactor fuel which does not produce any greenhouse gases or smoke as waste. China and India are increasingly reliant on nuclear fuel for power generation, and it is also an essential for Japan, Korea, Taiwan and Singapore, which have high energy consumption yet limited natural resources.

The Bureau of Resources and Energy Economics predicts that uranium demand will grow by 42 per cent between 2013 and 2017. Moreover, the World Nuclear Association has said it expects world uranium consumption to grow so much that production is going to have to double by 2020 to meet demand requirements. Global production grew by 52.5 per cent between 2000 and 2010 and has risen a further 6 per cent since 2010 - the highest level since the early 1990s.

In the period between 2006 and 2010 uranium production increased 26.5 per cent, but demand also grew by 9 per cent. Macquarie notes that demand is still outpacing supply by an average of 19,296 metric tones, and that in fact uranium is the only commodity for which demand has consistently exceeded supply. This pattern is predicted to continue into future years supporting a long-term upwards trend, the bank says – an investment opportunity made even more attractive by the fact that analysts believe that we are now at a price bottom for the metal.